Sea billions: how a Norwegian earned $9 billion on ships, oil and fish

Norwegian-born businessman John Fredriksen began as a ship owner, and eventually made a fortune on everything that could the sea give: from fish to offshore oil.
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Like a fish in oil

"When the cost of five-kilogram salmon in January [2016] exceeded cost of a barrel of oil, none of the oil companies that are not happy, - wrote to Bloomberg reporters in his study at the end of February. - For John Fredriksen, made a fortune on tankers and offshore oil, it was at least some consolation. After all, over the past year and a half of his wealth was reduced by 40%, while the value of its investments in the fisheries increased by half. "

In the summer of last year, has calculated the publication, the manufacturer of seafood Marine Harvest for the first time became the most expensive asset in the portfolio of the Norwegian Fredriksen. Prior to that, for many years the most valuable investment Fredriksen was a share of the drilling company Seadrill, founder and chairman of the board of directors which is a businessman. Through a chain of holdings Fredriksen has roughly equal shares in Seadrill and Marine Harvest - 23 and 26%, respectively. The value of these assets is different now almost nine times: $ 193 million compared to $ 1.7 billion.

Total Fredriksen owns five investment funds that control stakes in 16 companies: onimo fisheries and offshore drilling, they are engaged in shipping, logistics, oil and other oil services. A special case is oil trader Arcadia Petroleum, owned by Fredriksen personally. Since the main activity is a businessman in the oil industry, with the fall in commodity prices in the summer of 2014 the size of his fortune fell by almost half. In July 2014 Bloomberg estimated it at $ 17.1 billion.

The meter "real-time" state Forbes magazine Fredriksen at the end of February was $ 8.7 billion Bloomberg generous:. February 25, the agency estimates his fortune at $ 10.4 billion more than half of this amount ($ 5.7 billion) accounts for cash reserves. up $ 4 billion portfolio investments and about $ 1 billion - personal property.

cinched waist

On Thursday, February 25 the day after the publication of Bloomberg, Seadrill has published its financial results for 2015. Despite the crisis, the company managed to tighten their belts, to reduce their costs by $ 832 million (against the planned $ 600 million) and significantly exceed the forecast of net income: $ 285 million against the expected $ 238 million (an increase by 2014 of 82%). On this news andSeadrill tion on the stock exchange in Oslo soared by 8% to 15.2 crowns per share (approximately $ 1.75). However, over the past two years, Seadrill stock fell by 93%.

Oslo - New York - Singapore

John Fredriksen was born in May 1944 in German-occupied Norway. His father, Gunnar Fredriksen, a professional welder working in the concern "Norwegian Railways", and his mother, Johanna Erbekov, ruled buffet. Childhood and adolescence spent in the future businessman Etterstad town, working the Oslo suburb. In 1946 he became a member of Oslo and has since been one of the sleeping areas of the Norwegian capital.

During the war, the German army used to full capacity transport infrastructure in Norway - Soviet historians estimate that by the end of 1943 380 thousand soldiers were deployed in the country.. In Berlin developed plans to build near the Norwegian Trondheim "northern capital" of the Reich, the metropolis, which would become an important transport hub. Railway boom allows workers Fredriksen family make ends meet. John Fredriksen as a young man decided to follow his father's footstepsin the transport sector, but he chose not to railways and the sea - even though his house and was not far from the central Mercantile Oslo station, followed by the port was located.

In 16 years, John was hired by courier to the local steamship company Blehr og Tenvig, which provides brokerage services for freight vessels transporting fish. Parallel Fredriksen tried to study at night school, but dropped it and decided to educate ourselves, at the same time accumulating business experience. Soon he was offered the position of a broker.

Four years later left his native Norway Fredriksen: he received an offer of employment from the Canadian branch of the Norwegian company Fjell Navigation, and young professionals moved to Montreal. In Canada, he stayed only six months, and then, dissatisfied with working conditions, asked to be transferred to the Corporation office in New York. The new head of John, Torsten Voss, gave him as a novice broker complete freedom of action - in particular, the right to receive a commission from the transaction.

This approach on the part of his immediate superiors unleashes young businessman, but Fredriksen found himself immersed in business with little or no support, and began to look for another job. "Tickets for the home" for him was the manager Ole Schroeder proposal of the Norwegian shipping company AO Andersen - having worked for a year in New York, Fredriksen got home.

In Norway, however, he paused briefly - two years later he went to Singapore to place the deputy head of the regional branch of international shipping corporations Wallem & Co. The company was founded in 1903 in Shanghai and worked exclusively in South-East Asia: Hong Kong (later moved here company headquarters), Thailand, the Philippines. The Singapore office was opened in 1958, but only at the end of the 1960s there was the work attractive - an island nation gained fame as one of the most promising markets thanks to which began shortly before the anti-corruption reforms, Lee Kuan Yew

In just a few months Fredriksen got used to this completely unfamiliar market for themselves and for 25 years has led the Singapore branch Wallem & Co. But a year later he resigned from the company, which is toth time bought by the British. Earlier Fredriksen engaged mainly in transportation of fish, some of Singapore's home, he returned an experienced young specialist in chartering tankers.

Norwegian oil

At the time of the beginning of the business career of John Fredriksen and its meteoric rise coincided with the oil boom in his native Norway. The deposits of oil and gas were discovered in the kingdom belonging to the shelf in the North Sea in the early 1960s. The impetus for this was the discovery of large gas fields off the coast of the Netherlands in 1959. Several years of private transnational corporations received from the government license, carried out exploration, then drilling the first wells began in 1966.

Initially, the returns from these businesses was modest, and only in August 1969 opened the first major oil field - Ekofisk oil and gas region in the south-western part of the Norwegian continental shelf. Its development was engaged in the American company Phillips Petroleum, which is now part of ConocoPhillips Corporation. By the early 1980s, the volume of production at Ekofisk exceeded 400 th. Barrels. daily, now showingAtel dropped to about 130 thousand. barrels.

Over the past decade, oil and gas became the basis of the Norwegian energy. By 2014, according to the International Energy Agency (IEA), 44% of the energy produced by the country (in tonnes of oil equivalent) accounted for oil, another 15% - on the gas.

Getting the oil crisis has caused considerable damage to Norway. Over the half year, the Norwegian krone weakened by a third against the US dollar (and the first time in many years, fell below the Swedish krona). The devaluation of the krona has not saved from the collapse of the oil revenues, even in the national currency. In 2015, the value of oil exports amounted to 450 billion against 551 billion kroner a year earlier. At the current rate is about $ 52 billion and $ 63.6 billion respectively. The share of oil in the country's export earnings fell from 45.2 to 38.7%.

Hazardous investments

In Singapore Fredriksen met a risky business decisions that are unlikely to come to him, he remained in Norway. For example, he readily rented the old dry cargo, the freight which is much cheaper. The first such project failed: ship laden with cement downtimeaival in the Nigerian port of Lagos, while rents devastated reserves Fredriksen.

For maritime transport of oil Fredriksen returned a few years later - thanks to geopolitics. In the early 1970s he worked in Beirut, organizing through its new company Northern Shipping supply of Arab oil through Lebanon to Europe. With the beginning of the "Yom Kippur War" OPEC announced an embargo on oil sales to countries that support Israel. With the fall offers the world oil prices have soared, and suppliers became unprofitable to use large tankers. Many carriers went bankrupt, their vessels were rusting in the docks.

On the other hand, I saw Fredriksen in the unfolding energy crisis new opportunities. Using their knowledge of the industry in the Arab world of communication and the accumulated funds, he took tankers unused for long term rent, then buying them. Not for long, oil prices have stabilized, allowing Fredriksen build your own fleet in a relatively peaceful environment. In 1979, the collapse of production in Iran (and then in Saudi Arabia) has led to the next jump in prices. Onit businessman, according to Bloomberg, earned $ 40 million.

A few years later the businessman took the Iran-Iraq war. Direct deliveries of oil by pipeline from Iran to Syria (a key ally of Tehran) were not possible, and the company offered to the Islamic Republic of Fredriksen their services on transportation of oil tankers. Since then, the businessman prefers to work in a politically volatile environment: the higher the rate, the higher the profit.

Turnover on its axis

At the risk, Fredriksen does not always win. So, in 1986 he was arrested on charges of fraud and spent four months in prison. Norwegian prosecutors charged Fredriksen and several executives of his company that with their knowledge of the crews actually steal their oil is transported by using it as fuel for their vehicles. He was charged with fraud, as well as endangering the lives of the crew members - because the crude oil used instead of bunker fuel. The businessman still categorically rejects the accusations, although he had 30 years ago to go to the world accshenie.

Hostility to the Norwegian authorities, complex legislation and higher taxes led in the end to what Fredriksen in 2006 declined from the Norwegian passport, obtaining citizenship of Cyprus. With this step, he became the richest people in this country and led the 2015 "Index of Robin Hood," according to Bloomberg - section of his Greek state would benefit more than any other people.

Another trouble that befell Fredriksen - accident his Sea Empress tanker from Britain's shores in February 1996. The ship veered off course, and he was thrown on the rocks in the sea were about 73 thousand. Tonnes of North Sea oil. The vessel is owned by another company, Oriental Ocean Shipping, and passed around under the flag of Liberia, but Fredriksen publicly pleaded ultimate owner of the tanker, and even thought about to finish his career shipowner. By this time he was interested in the past two years other business - oil production from the sea shelf, but a real investment in the mining industry, he came just ten years later. And not leaving the shipping business, in 2005 founded the company Seadrill Fredriksen. Through mergers and acquisitionseny, he built it into one of the largest corporations in the industry with an annual turnover of more than $ 5 billion now the market will return to Fredriksen, where he started half a century ago, -. to fish sales.

Fredriksen and Russian

In May 2014, "Rosneft», NADL and Fredriksen company Seadrill, which owns 70% NADL, agreed to acquire the Russian company 30% NADL in exchange for assets and investments. The amount of the transaction was to be about $ 1 billion - this amount of "Rosneft" will contribute to the authorized capital NADL 100% in the "RN-Drilling", another $ 300 million in cash the company will provide. The second part of the transaction is expected to attract to the implementation of "Rosneft" projects on the shelf NADL six offshore rigs. The amount of the deal, as reported in July 2014, was $ 4.25 billion.

It was expected that the deal between "Rosneft" and NADL will be closed until the end of 2014, but was postponed to May 2015. In the fall of 2014, Bloomberg notes that the offshore contracts with "Rosneft" can increase the portfolio NADL orders by 65%.

In early January 2015, "Rosneft" has decided to postpone its shelf aboutkt in the Arctic - the company underwent drilling in the Kara Sea in 2016. Reuters agency notes that the company expects to decide on the contractor until April or May 2015. Among the options called the purchase of drilling at NADL, as well as freight oil platform in China or Korea. In April 2015, "Rosneft" and NADL transferred asset swap deal in May 2015 for a period up to 31 May 2017.